London open: Stocks fall on weak Asian cues; UK jobs data in focus

London stocks fell sharply in early trade on Tuesday, taking their cue from heavy losses in Asia, as investors mulled the latest UK jobs data.

At 0845 GMT, the FTSE 100 was down 1.4% at 7,091.48.

Lukman Otunuga, senior research analyst at FXTM, said: "A sense of caution continues to shroud financial markets due to ongoing geopolitical tensions, rising Covid-19 cases in China, inflation fears, and looming US monetary policy tightening.

"Earlier this morning, data from China exceeded market expectations but this failed to shake off the jitters and overall gloom. This could be the theme this week as the current themes overshadow economic data. With investors likely to maintain a defensive stance towards riskier assets ahead of the Federal Reserve meeting on Wednesday, equity markets could be in store for further punishment. The S&P500 remains under pressure and has shed over 4.5% this month. A solid daily close below 4150 could signal further downside, especially if risk-off remains the name of the game."

On home shores, figures released earlier by the Office for National Statistics showed that unemployment has fallen to pre-pandemic levels, but wages are struggling to keep up with soaring inflation.

Data showed there was both an increase in employment and a decrease in unemployment in the three months to the end of January 2022.

The headline unemployment rate was 3.9%, 0.2 percentage points lower than the previous three-month period, returning it to pre-pandemic levels. It was also below the consensus, for 4.0%.

The employment rate was 75.6%, 0.1 percentage points higher than the previous three-month period, but 1.0 percentage points lower than the three months to February 2020.

However, growth in regular pay - which excludes bonuses - was 3.8% in the three months to January 2022, or 4.8% including bonuses. Both rates are below inflation, which reached a 30-year high of 5.5% in the 12 months to January. The Bank of England expects inflation to continue rising, before peaking at over 7% in the spring.

Once adjusted for inflation, growth in total pay was 0.1% while regular pay - which strips out bonuses - was down 1.0% on the year. "Strong bonus payments over the past six months have kept recent real total pay growth positive," the ONS noted.

In equity markets, Asia-focused Prudential and Standard Chartered suffered heavy losses as investors fretted about the impact of Covid lockdowns in China and possible sanctions from the US.

Miners were also on the back foot as metals prices retreated, with Rio Tinto, Antofagasta, Anglo American and Glencore all weaker.

TP Icap slid as the inter-dealer broker said revenues were rising in the current fiscal year as market volatility increased over the Ukraine war, but reported an 81% drop in 2021 pre-tax profit.

Tobacco giant Imperial Brands lost ground after saying it had started talks to offload its Russian operations.

Informa was also trading down, giving up opening gains even as the specialist publisher posted a jump in annual revenues, helped by the return of in-person events following the worst of the pandemic.

On the upside, Redde Northgate gained as the commercial vehicle rental provider said full-year profits were set to be "comfortably ahead" of consensus expectations and announced a £30m share buyback.

Genuit - formerly Polypipe - also advanced on the back of well-received full-year results.

Market Movers

FTSE 100 (UKX) 7,091.48 -1.42%
FTSE 250 (MCX) 20,242.39 -1.12%
techMARK (TASX) 4,191.55 -1.20%

FTSE 100 - Risers

Reckitt Benckiser Group (RKT) 5,753.00p 1.00%
Airtel Africa (AAF) 143.30p 0.63%
Severn Trent (SVT) 2,867.00p 0.31%
Relx plc (REL) 2,138.00p 0.23%
United Utilities Group (UU.) 1,063.50p 0.19%
Evraz (EVR) 80.89p 0.00%
Meggitt (MGGT) 759.60p -0.03%
National Grid (NG.) 1,122.60p -0.05%
Informa (INF) 549.60p -0.11%
Ashtead Group (AHT) 5,064.00p -0.16%

FTSE 100 - Fallers

Prudential (PRU) 983.00p -5.84%
Standard Chartered (STAN) 471.70p -3.95%
Polymetal International (POLY) 162.10p -3.71%
Glencore (GLEN) 463.95p -3.65%
Scottish Mortgage Inv Trust (SMT) 845.60p -3.47%
Fresnillo (FRES) 696.60p -3.46%
Antofagasta (ANTO) 1,503.00p -3.41%
Rio Tinto (RIO) 5,123.00p -3.32%
Anglo American (AAL) 3,581.00p -3.18%
Melrose Industries (MRO) 122.90p -2.73%

FTSE 250 - Risers

Genuit Group (GEN) 535.00p 5.31%
Redde Northgate (REDD) 393.00p 3.83%
Baillie Gifford Shin Nippon (BGS) 165.20p 3.25%
Ferrexpo (FXPO) 150.20p 1.76%
Impax Environmental Markets (IEM) 444.00p 0.91%
Hipgnosis Songs Fund Limited NPV (SONG) 115.00p 0.88%
Domino's Pizza Group (DOM) 358.00p 0.73%
Energean (ENOG) 1,027.00p 0.69%
Pennon Group (PNN) 1,019.00p 0.59%
Convatec Group (CTEC) 180.10p 0.53%

FTSE 250 - Fallers

Dr. Martens (DOCS) 214.60p -7.82%
Virgin Money UK (VMUK) 165.00p -6.78%
Aston Martin Lagonda Global Holdings (AML) 822.80p -6.44%
Reach (RCH) 178.60p -5.80%
Currys (CURY) 87.05p -5.79%
Fidelity China Special Situations (FCSS) 216.00p -5.26%
Hochschild Mining (HOC) 123.50p -4.85%
Baltic Classifieds Group (BCG) 125.00p -3.85%
Beazley (BEZ) 419.70p -3.18%
888 Holdings (888) 188.10p -3.14%